Chart: Toward a Greater Great Recession

The blue line is where we thought we were. The red line is where we are.

Calculated Risk

Washington, D.C., has been wrestling for weeks now with how to cut government spending – a key sector of the economy.

Meanwhile, as you know from living in the rest of the world, the real problem is the economy. New government figures show that the Great Recession was greater than we thought. The recovery is nowhere. And good luck finding meaningful talk about a public stimulus to get the economy moving again. We’re at risk now of falling back into a shrinking economy, and if it shrinks long enough, a recession.

On a technical note, gross domestic product – GDP – was growing at an annualized rate of 0.4 percent in the first quarter. Healthy economic growth, for the U.S., is 2-3 percent.